Must the property insurance for a Gokhale Method franchise cover the replacement value of the business and its contents?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.1. Minimum Insurance Requirements. You shall procure, prior to the commencement of any activities or operations under this Agreement, and shall maintain in full force and effect at all times during the Term of this Agreement (and for such period thereafter as is necessary to provide the coverages required hereunder for events having occurred during the Term of this Agreement), at your expense, an insurance policy or policies protecting you, us, and the parties' respective officers, directors, partners, agents and employees against any demand or claim with respect to personal injury, death or property damage, business interruption, or any loss, liability or expense whatsoever arising or occurring upon or in connection with the Franchised Business, including, but not limited to, comprehensive general liability insurance, property insurance (including, but not limited to, fire, vandalism, and malicious mischief insurance for the replacement value of the Franchised Business and its contents), casualty insurance, business interruption insurance, statutory workers' compensation insurance, employer's liability insurance, product liability insurance, and automobile insurance coverage for all vehicles used in connection with the operation of the Franchised Business. Such policy or policies shall be written by a responsible carrier or carriers acceptable to us and shall provide at least the types and minimum amounts of coverage specified in the Teachers' Manual or Policy Statements. Furthermore, for franchisees located within the United States such policy or policies shall name us and our subsidiaries and Affiliates as additional insureds. We shall have the right, from time to time, to make such changes in minimum policy limits and endorsements as we may determine in our reasonable discretion.
- 13.2. Franchisor Entitled to Recover. All public liability and property damage policies shall contain a provision that we, although named as an insured, shall nevertheless be entitled to recover under such
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, franchisees are required to maintain property insurance that covers the replacement value of the franchised business and its contents. This insurance must protect the franchisee, Gokhale Method, and their respective officers, directors, partners, agents, and employees. The policy should cover losses related to personal injury, death, property damage, business interruption, or any other liability connected to the Gokhale Method business.
In addition to property insurance, Gokhale Method franchisees must also secure comprehensive general liability insurance, casualty insurance, business interruption insurance, statutory workers' compensation insurance, employer's liability insurance, product liability insurance, and automobile insurance coverage for all vehicles used in connection with the operation of the Franchised Business. The insurance policies must be written by carriers acceptable to Gokhale Method and provide at least the minimum coverage types and amounts specified in the Teacher's Manual or Policy Statements.
Gokhale Method also has the right to modify the minimum policy limits and endorsements as they deem necessary. For franchisees located within the United States, the insurance policies must name Gokhale Method and its subsidiaries and affiliates as additional insureds. Furthermore, all public liability and property damage policies must include a provision that allows Gokhale Method to recover under the policy even though they are named as an insured.